Welcome to Macro Musings, a new podcast exploring the important macroeconomic issues of the past, present, and future. In the inaugural episode, Scott Sumner joins host David Beckworth to talk about Scott’s new book *The Midas Paradox*, which advances a bold new explanation of what caused the Great Depression. They also discuss Scott’s path into macro and monetary economics as well as what the Fed got wrong in 2008.

David’s blog:

Scott’s blog:

Links from today’s conversation:

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Scott Sumner is a prominent economist known for his research on monetary policy and the Great Depression. One of his most notable works is *The Midas Paradox*, a book that delves into the causes and consequences of the economic crisis of the 1930s.

In *The Midas Paradox*, Sumner argues that the Great Depression was primarily caused by a monetary shock, rather than structural weaknesses in the economy. He suggests that had the Federal Reserve acted more aggressively and expanded the money supply during this period, the severity of the Depression could have been mitigated.

Sumner’s analysis challenges conventional wisdom about the Great Depression, which typically attributes the crisis to a variety of factors, such as the stock market crash of 1929 and banking panics. By focusing on the role of monetary policy, Sumner offers a fresh perspective on this key period in economic history.

In addition to his work on the Great Depression, Sumner has also made significant contributions to the field of monetary economics more broadly. He is known for advocating for the use of nominal GDP targeting as a tool for central banks to achieve macroeconomic stability.

Sumner has been a vocal critic of the Federal Reserve, particularly during the aftermath of the 2008 financial crisis. He has argued that the Fed’s response to the crisis was insufficient and that more aggressive monetary policy measures were needed to stimulate economic growth.

Overall, Scott Sumner’s work has had a significant impact on the field of economics, particularly in the areas of monetary policy and macroeconomics. His insights into the causes of the Great Depression and his advocacy for nominal GDP targeting have helped to shape the debate on how central banks can effectively manage the economy in times of crisis.